If you are in the market for a new home but do not know what home you want to buy yet, consider getting preapproval for your home loan before you even start your search. Getting preapproved for a loan is not difficult to do and can be very beneficial when you go to buy a home. The following guide walks you through a few reasons why preapproval for a home loan is a great option when it comes to shopping for a home.
Know Exactly How Much Money You Can Spend
When you get preapproved for a home loan, it lets you know exactly how much money you can spend on a home. This will save you time because you will be able to narrow the home search to homes within your specific price range.
Have Negotiating Power When Buying a Home
When you go to buy a home, you and the seller will negotiate back and forth as to how much you want to pay for the home. Many sellers are willing to negotiate with buyers you have been preapproved for a home loan because they know that the home purchase can be finalized much sooner than someone who has not applied for a loan.
Have the Ability to Consider Other Expenses
When you go to buy a home, knowing how much your mortgage payments will be each month allows you to take the other expenses into consideration when looking at homes. You can consider travel expenses to and from work, HOA fees, the cost for electricity, and if there are any water or sewage costs associated with the home. Knowing what to expect for a mortgage payment gives you the ability to know if you can afford all of the other costs associated with owning the house.
In order to get preapproval for a home loan, you need to go to a lender and apply for the loan. Each lender has their own specific stipulations that must be met in order to be approved for a loan. The lending officer will tell you everything you need in order to apply for the loan. If approved, the preapproval will be good for a specific amount of time so that you have plenty of time to find your dream home. The lender will provide you with a print out that states how much you are approved for so that you can prove to sellers exactly how much you can pay for the home.Share